Collision damage waiver (CDW), also called car rental insurance, removes a car renter's liability for all or some damage to a rental vehicle in an accident, similarly to collision insurance. CDW also may cover instances of theft or vandalism.

Collision Damage Waiver (CDW) is a common but often misunderstood term in the car rental industry. Strictly speaking, a standard CDW only covers damage to the "shell" or bodywork of the rental vehicle resulting from a collision. In 2026, many rental agencies in Europe and North America bundle it with Theft Protection (TP), but they are technically separate products. If your contract only specifies "CDW" and does not explicitly mention "LDW" (Loss Damage Waiver) or "Theft Protection," you might be financially responsible for the full value of the car if it is stolen. Theft protection typically covers the cost of replacing the vehicle and any damage caused during an attempted theft, though it usually carries a high deductible or "excess" unless you purchase a "Super CDW" or "Zero Excess" policy. It is also important to remember that neither CDW nor TP covers your personal belongings inside the car; for those, you would need to rely on your personal travel insurance or a comprehensive credit card benefit that covers "Loss of Use" and "Theft" in addition to basic collision damage.